What sourcing, CSRD and CSDDD have in common
What do Sourcing and Sustainability (and especially the CSRD and the CSDDD) have in common? That question was central to a workshop that Erik and I facilitated together during a theme meeting of the independent professionals (ZP-group) of Sourcing Nederland. From 2iQ Management & Consultancy, Erik has been a sourcing expert for years as a member of this association, which aims to share knowledge, build experiences and exchange good practices with each other.
Sourcing and CSRD
We previously discussed the common ground in our domains at the kitchen table. With the arrival of mandatory sustainability reporting due to the CSRD, the annual report is no longer a standalone activity for a company. In order to report on Environmental, Social, and Governance (ESG) topics, the value chain must also be considered. Both upstream and downstream, it requires insight into chains and, therefore, the need to look beyond the boundaries of your organisation.
Sourcing and CSDDD
The relationship between sourcing and the CSDDD is even stronger. The CSDDD requires companies to carry out continuous due diligence research. This is the process that a company carries out to identify, prevent, mitigate and remedy the most significant actual and potential negative impacts associated with its activities. The due diligence process covers the company’s entire value chain, not only its activities, products and services but also those of business partners and others in the supply chains.
This means that companies must evaluate and, where necessary, adapt their products, production processes, and supply chains. This has implications for the company’s governance, for the provision of information on key sustainability topics, and for the way in which contracts are concluded. Because responsibility does not stop at the company’s boundaries, the CSDDD is, therefore, an important focus in every sourcing relationship.
Possible prospects
Sourcing is the collection of all activities carried out by third parties on behalf of an organisation. The sourcing lifecycle extends from strategy via procurement to implementation, the delivery of products and services, and the governance of the entire ecosystem. The due diligence steps must be integrated into all these activities to give substance to the CSDDD.
It would be fun to bundle our knowledge and experience in these areas and work together. With this first workshop, we have made a start that we would like to continue.